You touch on an often overlooked but critical topic. We spend considerable time and money acquiring the gear and skills we might need to be prepared for a variety of potential disasters/disruptions either natural or man-made, but often overlook preparation for sudden/unexpected debilitating medical problems, or worse unexpected death from any number of possible causes.
This strikes a nerve with me because my dad died suddenly and quite unexpectedly at the age of 43 from a massive heart attack. I was 17 years old at the time. If anyone thinks this does not turn your world upside down, I would beg to differ. Now, I am a CPA/MBA, and have some knowledge about what people go through when they find themselves in this kind of situation, and some experience in what can be done to minimize the chaos and confusion. These are always very stressful, emotional situations, and it can be VERY difficult to keep things held together and keep everything from going to hell in a handbasket. Trust me. I know.
The best way I know to prepare for this type of event:
1. Collect ALL important documents into one place. Birth Certificates, Marriage License, Titles and/or deeds to Vehicles/Home/Properties/Boats, etc. ALL Insurance policies…life, health, disability, homeowners, auto, boat, medevac, umbrella liability,long-term care etc., wills, living wills, military service records, professional licenses, and any other documents you consider important or critical. Include copies of your most recent 2 years of tax returns. Also include the articles of incorporation and bylaws/operating agreement for any closely held businesses you own or in which you have ownership interest as a partner, member, director (Sole propietorship, partnership, LLC, Sub S corporation, etc),
2. Make copies of all above documents. Place originals in lockbox and keep copies at home for reference…or vice versa, depending on your opinion on this matter. Some people prefer to have the original copies in their personal possession. Some documents may warrant having certified copies made or requesting certified copies from the issuers.. Again, this is a personal decision. This collection would be one of the critical items you would grab in a bug-out situation anyway, so having it all together is a good idea for lots of reasons. Obviously you would want to store these in-home in some kind of secure, fireproof portable box that would be hard for a burglar/looter to find, but easy for you to grab and go at a moment’s notice. Fireproof file boxes are available that suit this purpose well. And obviously, since these things lock, be sure somebody besides just you knows the combination or how to locate the combination or key.
3. Make a list of every debt you owe, the balance as of some specific date in time, the minimum payment, payment due date, account number, and website/username/password to the account if applicable. Likewise with all checking/savings/investment/brokerage./401k/IRA/HSA accounts.
This enables your appointed administrator/trustee to see at a glance the location of all your financial assets and liabilities, and the mechanism by which to access them should the need arise. Original debt instruments would not be a bad idea to add to the list of important documents, especially real estate mortgages, auto loans, and other collateralized debt instruments that create liens against any of your properties or assets.
4. Make a list of all the vendors you deal with, and again, any relevant account information and internet access information if applicable. This would include utilities, security system,pest control, newspapers, insurance premiums,and any other ongoing/regular vendors you deal with or are contracted with for ongoing services that result in monthly or quarterly bills to be paid.
Be sure to note any accounts (vendor or creditor accounts) that you have set up to automatically debit your checking account or charge to a credit card account each billing cycle. This will alert your administrator to keep adequate funds in place to cover these automatic transactions. Also note any accounts that are set up for electronic statement delivery. It seems that every company is pushing us to “go paperless” and stop receiving paper statements. This will alert your administrator to keep an eye on your email for statement notifications.
5. Keep the document inventory updated…adding information for new accounts as they are created and removing documents for accounts that are closed and for which you will have no further potential use.
With the above items located and placed in an organized manner, it should be possible for your designated trustee or administrator (whether your spouse, family member, attorney, or bank trustee) to pick up and administer your affairs in a thorough and reasonable manner should you be incapable of doing so for yourself for any reason.
I hope you an others find this helpful.I’ve tried to hit the most important issues in a short amount of space, so I’m sure there are some details I’ve overlooked.